Reason 1: Grow your wealth – A great way to grow your wealth and net worth is to not outspend your budget. Always have a category for investing and wealth building. Just paying your bills and nothing more will not build wealth for your family. Many people only save and call that investing. You won’t be able to get ahead this way and will have a difficult time keeping up. I have watched too many people meander through life thinking saving alone will be enough.
Learn all you can about different types of investment vehicles. There is a multitude of free information available to you in videos, articles, books, etc. This is one area of your life in which you need to become educated. Many online discount brokerage companies have webinars to teach the basics of investing. Invest your time into this type of education. You won’t regret it.
Reason 2: Time is on your side – Don’t put off saving and investing one day longer. Live on less than you make and you can invest the difference. With more years to invest until retirement, your earnings will have longer to grow and build momentum.
I tell my students all the time to begin investing as soon as possible. If you are a parent, your children need your guidance on how to plan for their future. They want to know you have college savings set aside for them. The compounding effect is an important component to building your wealth. Don’t waste any more valuable time. Start today!
Reason 3: Unexpected events happen – We all know it’s true. The air conditioner breaks down unexpectedly during July when it’s 90 degrees in the shade. The pipes burst on the weekend and you have to pay extra just to get the plumber to come out. The engine in your car dies and you don’t have a way to get to work. These things just happen and you have to deal with them when they do. Having money set aside for these types of emergencies is a necessity.
Do you have at least 3 months worth of income set aside for emergencies? What if you were to lose your job tomorrow? Are you prepared? If you live on less than you make and you lose your job, you can survive on a lower income because you are already living that way. When you have your budget stretched to the max and you lose your job, you can’t make it financially.
Reason 4: You want to retire some day – I think we can all agree that we hope to retire some day. Most people don’t really want to work until they are 80 years old, but some people have to work well into their 70s just to make ends meet. They don’t have a choice, but you do. Make those retirement plans and set goals to get you there. By living on less than you make, you can invest more into a retirement plan so that you don’t have to work longer unless you choose to.
Reason 5: You want to leave your family financially secure – I have always wanted to leave my family much better off financially than they are now. I hope to leave a lasting legacy for generations to come because I wisely invested my money. The last thing I want to do is be a financial burden on my family. You can still have a great life by living on less than you make and you can bless future generations for years to come.
What will your financial legacy be if you continue down the financial path you are currently on? Will it be a legacy of blessings or of burdens? Only you can make the choice. Choose to leave a legacy of financial freedom!